Opposition expresses concern on proposed tax holiday for investors

Wednesday, 27 September 2023 00:10 - - {{hitsCtrl.values.hits}}

FPC member and MP Prof. Charitha Herath

Says there is need for thorough and comprehensive discussion on proposed tax break
Accuses consecutive Govt.’s of providing tax holidays to cronies who avoided paying owed taxes
Assures Opposition will closely observe process to ensure no deals occur on the sidelines

Freedom People’s Congress (FPC) member and MP Prof. Charitha Herath yesterday expressed his concern about the Government’s attempt to introduce a two-year tax holiday for major investors.

Addressing a press conference, Herath emphasised the need for a thorough and comprehensive discussion of the proposal.

“This is a country fraught with tax frauds. Every six years, successive governments provide tax holidays, essentially pardoning companies that have evaded taxes for an extended period,” he said.

According to reports the Government is contemplating the reintroduction of tax exemptions for a period of two years for both local and foreign investors embarking on projects exceeding $ 50 million (Rs. 16 billion), coupled with the provision of duty-free vehicles. These proposals are anticipated to be included in the 2024 budget, which is presently undergoing deliberation.

The MP noted this is a vicious cycle which allows these businesses to continuously avoid paying taxes owed to the Government.

“‘Frequently, tax proposals introduced by Sri Lankan governments are questionable and problematic. When businesses owned by close associates neglect tax payments, they approach current Government leaders seeking tax concessions,” the MP alleged.

Herath said the Opposition will closely observe the process of providing tax breaks. “Even though it stipulates that businesses will have to bring in Rs. 16 billion as an investment upfront it is common knowledge that other deals take place on the sidelines,” he noted.